Former borough manager questions justification for tax hike, says loaning taxpayer money to business is wrong

Meiskey: "Loaning the money out to certain individuals and certain zones for their private property improvement and their private use and enjoyment is wrong."

A business loan fund and an increased number of borough personnel are the culprits driving a purported need for a proposed tax hike for 2019, according to former Borough Manager Norm Meiskey. Meiskey, armed with a sheaf of papers at Monday's borough council meeting, also said the hike of 1.4 mills, or 21.2%, is unnecessary, unjustified, and just plain wrong. (Borough council plans to vote on the proposed increase this coming Thursday at a special borough council meeting.)

Meiskey characterized the borough's "Columbia Commercial Revolving Loan Program," which he calls a "slush fund," as unfair to taxpayers. The program was created by ordinance earlier this year to finance projects undertaken by local businesses by drawing funds mainly from tax revenue. In essence, taxpayers foot the bill to finance local businesses. The ordinance calls for a fund balance of $1.5 million to be made available to local businesses. Meiskey noted that the borough is planning to put $800,000 into the loan fund.

"There's already 1.5 million in there, and I still am very, very skeptical as to the legality of that ordinance," Meiskey said of the loan fund. "You don't help businesses whatsoever by tax increases," he continued. "You don't help residents whatsoever by tax increases that are loaned out for certain people, certain businesses, in certain districts in the borough." Meiskey cited mechanisms already in place to help business: LERTA, redevelopment authorities and KOEZ. "But the taxpayers . . . loaning the money out to certain individuals and certain zones for their private property improvement and their private use and enjoyment is wrong." Meiskey said he doesn't know where in the Borough Code it says municipalities can be a loaning Institution.

"You don't help residents whatsoever by tax increases that are loaned out for certain people, certain businesses, in certain districts in the borough."

Two businesses have applied for the funds so far. Cimarron Investments LLC, owned by local developer Don Murphy, received a quarter of a million dollars from the fund (according to Borough Manager Rebecca Denlinger at the November 26, 2018 Finance Committee meeting). Eberly Meyers LLC requested a loan of $400,000 for its Locust Street apartment project. A subsequent request for an increase to $650,000 was rejected.

"You're taxing the taxpayers of this community to loan out money," Meiskey continued. "Tax increases in this borough is nothing but detrimental to the taxpayers, the property owners - certainly businesses. That's the worst thing that can happen to them."

Meiskey cited an increase in the number of borough employees as another factor behind the tax hike. The 2015 sale of the borough's wastewater treatment system to LASA should have reduced the overall workload, according to Meiskey, who provided the projected workload reductions: 100% of two clerks, 50% of an accountant, one-third of the finance manager, one-half of the public works director, 100% of the wastewater treatment plant manager. "The plan was to allow attrition to take place" within two-and-a-half years, starting from June 2013, Meiskey said. The plan also included having the accountant and the borough manager handle budgetary matters and the borough manager overseeing the human resource aspects, due to a 25 to 35% reduction in the borough manager's workload because of the transition.

"Instead, we've hired people, and we've hired them to a point where you're looking at tax increases," Meiskey said. "That's not helping this borough whatsoever. It's certainly not going to help the taxpayers. You'll be taxing senior citizens out of their homes. It's a very serious matter." Meiskey noted that the number of clerks and managers has increased.

Meiskey noted that the average benefit package for a full-time employee is 35% of the salary and recommended hiring part-time employees to eliminate the need for the additional benefit expense. He said doing so would help preserve funds previously put together by the borough's Municipal Authority to afford the borough a financial position "like never before." The Authority was dissolved by council two years ago.

"There's just no way that you can justify a tax increase. There's no way - if the borough's being managed properly. The numbers speak for themselves."

According to Meiskey, auditors stated that the borough spent $6 million from reserve funds in the past year, with $18 million remaining in general and capital funds. "There's just no way that you can justify a tax increase," Meiskey said. "There's no way - if the borough's being managed properly." Meiskey added: "The numbers speak for themselves."

"We're going down the wrong road here for tax increases," Meiskey said. "There's no rhyme or reason for it. There's no justification for it."

Meiskey addressed council about similar issues last June, as Columbia Spy reported HERE.

Columbia Borough Council will hold a meeting on Thursday, December 13, 2018, at 6 p.m. at the Municipal Building, 308 Locust Street to consider adopting the 2019 borough budget and to consider adopting Ordinance No. 907 fixing the real estate tax millage rate for 2019 at 8 mills, which is $.80 of tax for each $100 of assessed real estate valuation, and represents a tax increase of 1.4 mills, or 21.2%.